Surge in complaints against FMCG firms over GST rate cut benefits

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The National Anti-profiteering Authority (NAA), the body tasked with ensuring that businesses pass on benefits of GST rate cuts to consumers, is witnessing a surge in complaints relating to overcharging by fast moving consumer goods (FMCG) companies. The GST anti-profiteering authority had received more than 300 complaints from customers in recent weeks about firms not passing on to them the full benefit of GST rate cuts on handwashes, deodorants, scented oils and cosmetics, two people familiar with the development said.

The surge in complaints hints at the challenges faced by manufacturers in ensuring that prices of all products in their portfolio are reduced in line with GST rate cuts and rebates on inputs. The complaints received by NAA, as well as its state-level screening panels, cover a large number of consumer items, including khadi products, baby wash, disinfectant gels and haircare products, one of the two people cited above said on condition of anonymity.

NAA is expected to come out with orders on many of the items over the next three months, said the person. The Directorate General of Anti-profiteering investigates complaints and NAA adjudicates on cases. Once a probe is completed, NAA has a maximum of three months to give its ruling. In many cases, the hearings were at an advanced stage, said the person.

The anti-profiteering watchdog was set up in November last year, nearly five months after the goods and services tax (GST) was implemented on 1 July 2017. In recent months, NAA and the tax administration have stepped up efforts to make sure that customers get the benefit of GST rate cuts. NAA accepts customer complaints through its website and has a helpline for consumers.

Queries emailed to companies such as Himalaya Drug Co., Khadi Natural Healthcare, Johnson and Johnson Pvt. Ltd and L’Oréal India Pvt. Ltd and to an external spokesperson for online retailer Cloudtail India Pvt. Ltd remained unanswered till press time.

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